Data-driven innovation has the potential to be a major part of the European effort to grow the economy. In addition, data is at the heart of many initiatives that will have a substantial positive impact on the welfare of individuals and communities, such as to improve healthcare and education. However, these opportunities will not be fully realised unless European policymakers embrace the potential of data driven innovation. Going forward, European leaders should focus on creating policies that enable data to be shared and reused throughout the economy so as to maximise the benefits of data.
The Data Economy
When it comes to the economy, if Europe hopes to close the productivity gap that has steadily widened since 1995 between itself and the United States, it should look to greater adoption of information technology (IT). Unfortunately many European policymakers have focused more on how to grow their own domestic IT services sector, including through efforts such as building a “European Cloud”, rather than on promoting the use of the technology itself in established industries. However, European policymakers should worry less about building the infrastructure to store and process data, and more about how to extract insights from these data sets.
European policymakers do not need to look abroad to see the positive impact of data. By all accounts, the potential economic impact of big data in Europe is substantial. McKinsey Global Institute, for example, estimates that big data can save the public sector alone more than €100 billion in operational efficiency improvements. Today, many of Europe’s top companies are investing in big data analytics to stay competitive in the global economy. For example, Royal Dutch Shell has partnered with companies like IBM, HP and Dreamworks to use data, sensors, and advanced visualisations to explore thousands of oil wells; retail giant Tesco uses in-store sensors and predictive modeling to optimise the heating, cooling, and refrigeration systems in its stores to cut costs and prevent spoilage; and the Dutch bank ING leverages technologies like cloud computing to integrate huge data streams from its website, call centres, and online user feedback to derive new customer insights. And for some companies the challenge is less about acquiring technology, and more about how to leverage the technology in place. As Volkswagen CEO Martin Winterkorn has noted, “Our cars are already mobile computer centres, with 1.5 km of cables, more than 50 control units, and the computing power of 20 highly advanced PCs.”
Quality of Life
In addition to economic improvement, there are a growing number of opportunities to use data and analytics to improve quality of life for citizens and address important social issues such as healthcare and education.
With an ageing population set to increase demand for healthcare, Europe faces mounting pressure to improve the effectiveness and efficiency of its healthcare system. European policymakers should look to data as a tool to radically improve healthcare quality and bring down costs. Data is being used today to do everything from developing new drugs to delivering care to patients, and public health officials can use better data to improve disease surveillance and help prevent the spread of communicable diseases. Healthcare providers are also leveraging data in electronic health records to improve diagnostics and clinical decisions for patients, and medical researchers are analysing clinical trial data and genomic data to identify new treatments tailored for specific populations and unlocking the promise of personalised medicine. For example, pharmaceutical company Pfizer used its advanced data capabilities to develop a drug for a specific type of lung cancer associated with a gene mutation, and the European Medicines Agency granted it conditional approval. These types of advances are only possible because increases in computing power have dramatically lowered the price of using data in healthcare. While it took the Human Genome Project $3 billion and ten years to sequence the first human genome, companies are now able to do this in a matter of hours for less than $1,000.
Wearables and other connected devices offer another opportunity to use data to modernise healthcare. Activity trackers, such as those offered by FitBit, Jawbone, and Nike, can be used to improve personal fitness by monitoring individuals’ progress, encouraging them to complete their goals, and providing incentives such as discounts to keep individuals motivated. These devices can also help patients obtain better healthcare outcomes. Healthcare providers can also use wearables and connected devices to offer patients better remote monitoring services in their own homes. These types of services not only give individuals greater independence, but they also keep them out of the hospital thereby cutting costs. For example, patients can use smart pill bottles to receive automatic reminders so they do not forget to take their medicine. These types of interventions, while seemingly small, can have a major impact: 50 per cent of Europeans do not take their medication as prescribed and reducing non-adherence could save Europe €125 billion annually and reduce premature deaths by 200,000 per year.
Data stands ready to disrupt the education sector. Just as data can be used to create personalised medicine, data can be used to deliver personalised education, build more efficient schools, and help students and their parents make better decisions about their education.
By making better use of data and analytics, educators can tailor lessons to students’ specific learning styles and allow students to learn at their own pace. Schools can use adaptive learning software with integrated analytics to assess student performance and then spend more time focused on each student’s individual needs. Educators can link this data to other school records, including classroom behavior, to better monitor their classrooms, intervene when problems arise earlier, and create custom learning plans. A number of European schools are beginning to provide their teachers with tools like learning analytics software and online dashboards so they can use data to improve their teaching methods.
Data can also be used to create more efficient public schools, as well as lead to improvements in higher education. Schools are using data to help reduce dropout rates by intervening sooner when students are at risk. Colleges and universities are using data mining techniques to process a multitude of data points, such as the number of times students check in to the library and how often they log into virtual classrooms, to predict student achievement. For example, Manchester Metropolitan University and Leeds Metropolitan University in the UK use analytics to help improve their retention rate.
Finally, students and their parents can make better decisions about their education, such as where to go to school or what to study, using better data that helps predict both costs and future earnings. These types of tools can help ensure students obtain the skills demanded by employers and ensure that Europe has a competitive workforce with the skills needed to compete in a global economy.
A 21st Century Approach to Regulating Technology
Better use of data helps drive improvements in efficiency, better decisions, and more rational investment. Given their importance to people’s lives and livelihoods, hospitals and schools should be the first place data is used, not the last. As European policymakers work to grow the economy and address major social issues, they should consider carefully the role of data in achieving these ends. Doing so will not only require bold government leadership to promote the adoption of data-related technologies in industries like healthcare and education, as well as public education about the benefits, it will also require rethinking policies that impact how data is allowed to be used.
Both the rapid pace of technological progress and competition from global peers means that regulations which inadvertently slow down innovation will have an outsized impact on the economy as other countries take the lead. In particular, European policymakers should move away from a “privacy at all costs” mentality that restricts data flows both between organisations and across borders. Instead, Europe should embrace a 21st century approach to regulating technology that encourages beneficial applications while narrowly targeting rules to address specific consumer harms. Importantly, this will require rethinking existing data regulations, as well as new proposals such as the General Data Protection Regulations, which can have a chilling effect on the use of data, and instead supporting an environment that encourages sharing and reuse of data. Long term, the goal of European policymakers should be to actively work to promote the use of data and maximise its potential benefits. Doing so will allow Europe to better address its most pressing challenges, as well as position itself to better compete in the global economy.
 Ben Miller and Rob Atkinson, “Raising European Productivity Through ICT,” June 2014, Information Technology and Innovation Foundation, http://www2.itif.org/2014-raising-eu-productivity-growth-ict.pdf.
 “Big Data: The next frontier for innovation, competition, and productivity,” McKinsey Global Institute, May 2011, http://www.mckinsey.com/insights/business_technology/big_data_the_next_frontier_for_innovation.
 “VW CEO: Yes To Big Data, No To Big Brother,” Forbes, March 9, 2014, http://www.forbes.com/sites/christinentierney/2014/03/09/vw-ceo-yes-to-big-data-no-to-big-brother/.
 European Medicines Agency, “Xalkori,” July 5, 2014, http://www.ema.europa.eu/docs/en_GB/document_library/EPAR_-_Summary_for_the_public/human/002489/WC500134762.pdf.
 “Breakthrough: Now we can sequence a human genome for just $1000,” IO9, January 15, 2014, http://io9.com/breakthrough-now-we-can-sequence-a-human-genome-for-ju-1502081435.
 “Patient adherence,” European Federation of Pharmaceutical Industries and Associations, n.d., http://www.efpia.eu/topics/people-health/patient-adherence.
 European Commission, “The NMC Horizon Report Europe: 2014 Schools Edition,” 2014, http://cdn.nmc.org/media/2014-nmc-horizon-report-EU-EN.pdf.
 Ruth Drysdale, “University Data Can Be A Force for Good,” The Guardian, November 27, 2013, http://www.theguardian.com/higher-education-network/blog/2013/nov/27/university-data-student-engagement-retention.
 Travis Korte, “Proposed EU Data Protection Regulations Could Impede Medical Research,” Center for Data Innovation, October 21, 2014, http://www.datainnovation.org/2014/10/proposed-eu-data-protection-regulations-could-impede-medical-research/.
This chapter is Daniel Castro’s contribution to the book, Sharing in the Success of the Digital Economy, published by Policy Network, an international think tank and research institute. Download or buy the book.
Image: flickr user Bobby Hidy.